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The simplest way to think about Ethereum is to compare it to something you probably use every day: your mobile phone. If you have an Android or iOS phone, you have apps that can perform a wide variety of functions from ordering an Uber to mapping a route across town. What gives Ethereum an edge against Bitcoin is its implementation of smart contracts, which allows developers to run decentralized applications, or dapps, directly on the Ethereum blockchain.
Although the possibilities for smart contracts are nearly endless, a few dominant use cases have emerged. With traditional cryptocurrency exchanges, a user has to deposit their funds in order to make trades. This requires the exchange to act as a trusted custodian of those funds.
While interest in the latter is soaring, Ethereum is growing in popularity as well. The companies involved ranged from Chinese technology giants to U. Bitcoin also has to deal with scalability issues. And while the market value of Bitcoin is significantly higher than that of any form of digital currency on the market right now, it is closely followed by Ethereum, which hopes to take over one day. This reward is expected to be halved every , blocks.
Yet with several major exchanges having suffering hacks , many investors are wary of depositing large sums of cryptocurrency onto exchanges that may not be trustworthy custodians. Decentralized exchanges mitigate the custodian problem entirely. Rather than trusting an exchange as the custodian, a user can simply send their funds into a smart contract address, which gives the user and only the user control over their funds.
All trades are executed directly on the Ethereum blockchain, which ensures that the user always has full control over their exchange balances. In the next twelve months, this figure rose to , One of the main issues that have been raised with Ethereum was its scalability. And some of these issues were exposed when one of the first massively popular dapps, crypto kitties, nearly crashed the network when it was launched.
The future of Ethereum will largely depend on how they tackle these issues. One of the solutions proposed was sharding, which allows them to compress larger blocks and make them easier to process and store.
Those who wish to invest in Ethereum, however, should focus on getting the latest crypto news from reputable sources and take any predictions with a grain of salt. Bitcoin also has to deal with scalability issues.
As more people use the coin, more and more people have to wait in line for miners to authenticate their transactions. This not only slows down transaction speeds, but users now have to pay more to move in front of the line and get their transactions authenticated faster.
Many solutions have been proposed to deal with the issue, with the most popular being the lightning network.
The lightning network is a separate network that allows people to conduct a number of off-chain transactions by opening payment channels between parties. This would put less of a strain on the network and allow it to run more smoothly. How high Bitcoin will go will also depend on how successful the lightning network is and if we start seeing more adoption from retailers.
But is BTC or ETH a better investment? and in recent years the ability to trade Bitcoin futures contracts has helped formally induct the crypto. Ether and bitcoin are similar in many ways: each is a digital currency traded via online exchanges and stored in various types of cryptocurrency wallets. Both of.